Ghana’s Construction Inflation Slows to 4.4% in December 2025

Introduction

Ghana’s construction sector has experienced a significant shift in economic conditions as the country’s development inflation rate dropped to 4.4% in December 2025. This marks the eighth consecutive month of declining inflation in the construction industry, signaling a period of price stability that could benefit developers, contractors, and property buyers across the nation.

Key Points

Background

The construction industry in Ghana has faced significant challenges over the past few years, with volatile material costs and supply chain disruptions affecting project budgets and timelines. The Prime Building Cost Index, released by the Ghana Statistical Service, serves as the primary indicator for tracking these cost fluctuations in the sector.

Dr. Alhassan Iddrisu, the Government Statistician, presented the December 2025 report, which revealed a remarkable turnaround in construction cost dynamics. The data shows that building input costs in December 2025 were only 4.4% higher than the same period in 2024, compared to a staggering 22.65% increase just one year prior.

Analysis

The transition from double-digit inflation to a moderate 4.4% represents more than just a statistical improvement—it signals fundamental changes in Ghana’s economic landscape. Several factors likely contributed to this stabilization:

**Supply Chain Normalization**
The global supply chain disruptions that began during the pandemic have largely resolved, allowing for more predictable material deliveries and pricing. This normalization has particularly benefited the construction sector, where material availability directly impacts project costs.

**Currency Stability**
The Ghanaian cedi has shown improved stability against major trading currencies, reducing the cost volatility of imported construction materials. This currency steadiness has translated into more predictable pricing for items like cement, steel, and specialized equipment.

**Policy Interventions**
Government initiatives aimed at supporting the construction sector, including tax incentives and streamlined import procedures for building materials, have likely contributed to the cost reductions.

**Market Competition**
Increased competition among suppliers and contractors has put downward pressure on prices, particularly as the market adjusts to the new economic reality.

The month-on-month negative inflation of -0.2% is particularly noteworthy, as it indicates that construction input costs actually declined between November and December 2025. This is an unusual occurrence in the construction sector, where costs typically trend upward due to seasonal factors and year-end price adjustments.

Practical Advice

For stakeholders in Ghana’s construction industry, this period of price stability presents several opportunities:

**Contract Planning**
Developers and contractors should consider locking in material prices through forward contracts while rates remain stable. The current environment offers a window to secure predictable costs for upcoming projects.

**Investment Timing**
Property investors may find this an opportune moment to enter the market, as construction costs are unlikely to decrease significantly further but could begin rising again if economic conditions change.

**Budget Forecasting**
The improved predictability in construction costs allows for more accurate long-term budget planning, reducing the risk of cost overruns that have plagued many projects in recent years.

**Supply Chain Optimization**
Companies can now focus on optimizing their supply chains rather than constantly adjusting for price volatility, potentially leading to operational efficiencies.

FAQ

Conclusion

Ghana’s construction sector has reached a pivotal moment with inflation falling to 4.4% in December 2025. This eight-month trend of declining inflation represents a fundamental shift from the volatile pricing environment of recent years to one characterized by stability and predictability. For an industry that has struggled with cost uncertainty, this change provides a foundation for more sustainable growth, better project planning, and improved investment confidence.

The data suggests that the intense price pressures experienced by the construction industry have moderated substantially, creating a more favorable environment for development projects across the country. As stakeholders adjust to this new reality, the focus can shift from managing inflation risk to optimizing operations and expanding capacity to meet Ghana’s growing infrastructure needs.